The Occupational Safety and Health Administration (OSHA) regulates highly hazardous chemicals, in part, through the Process Safety Management (PSM) standard, which states “This section contains requirements for preventing or minimizing the consequences of catastrophic releases of toxic, reactive, flammable, or explosive chemicals. These releases may result in toxic, fire or explosion hazards.” 29 C.F.R. § 1910.119. Recent discussions by a federal working group may result in expansion of the PSM standard to include additional industries and could lead to increased OSHA enforcement activities. In addition, suggestions for strengthening the civil and criminal penalties for safety violations could affect all employers subject to the OSH Act, not just those covered by the PSM standard.
OSHA’s Efforts to Implement Executive Order
In an effort to improve the safety and security of chemical facilities and to reduce the risks associated with hazardous chemicals, President Obama issued Executive Order (EO) 13650—Improving Chemical Facility Safety and Security (EO 13650) last year. The EO 13650 established a working group co-chaired by the Secretary of Homeland Security, the Administrator of the Environmental Protection Agency, and the Secretary of Labor (the Working Group) to address and reduce hazards associated with the hazardous chemicals in the United States.
Following the issuance of EO 13650, the Working Group published the “Solicitation of Public Input on Options for Policy, Regulation, and Standards Modernization.” That document served as a starting point to identify the preliminary options for stakeholder discussion regarding increased safety and security for hazardous chemicals. In May 2014, the Working Group published a status report on their efforts to comply with the directives set forth in EO 13650 — Actions to Improve Chemical Facility Safety and Security – A shared Commitment (Status Report.
OSHA’s Federal Plan of Action
Although it remains unclear what impact, if any, EO 13650 will have on OSHA’s enforcement regime, the Federal Action Plan’s section entitled “Modernizing Policies and Regulations,” strongly suggests that OSHA intends to expand the scope of the PSM standard as well as increase civil and criminal penalties.
The Status Report states the following: “Using lessons learned from incident investigations, enforcement experience, and comparison with industry practices and regulatory requirements of other States, counties, and countries, OSHA determined that a stronger PSM standard can more effectively prevent incidents and protect workers.” (Emphasis added). Many of OSHA’s immediate provisions address ways to clarify the PSM standard. Specifically, the Status Report states that in the year following the publication of this report, OSHA will clarify a number of elements of the PSM standard, including
interpretations of various definitional terms such as “retail facilities”;
revising jurisdictional concentration levels of chemicals covered by the PSM standard;
whether Ammonium Nitrate as a covered chemical under PSM standard; and
determining whether to include oil and gas drilling and servicing operations under PSM standard, which are currently exempt;
More Industries May Be Subject to PSM Standard
Though styled as a means to “modernize” OSHA’s PSM standard to improve safety, the Federal Action plan suggests a much broader OSHA enforcement regime. Indeed, the Federal Action Plan does contain action items that suggest a concerted effort to clarify various ambiguities in the PSM standard, but the overall thrust of the plan appears to focus heavily on including more industries under the jurisdiction of the standard.
Increased Penalties Sought for All OSHA Violations
The Status Report also provides a clear indication that OSHA will attempt to increase the civil and criminal penalties through legislation. Currently, violations of the OSH Act can lead to civil penalties of up to $70,000 per violation. Criminal penalties, however, are only imposed for willful violations that cause an employee death. Criminal penalties can total up to $10,000 and not more than six months in jail for a first conviction, and up to $20,000 and not more than twelve months in jail for a second conviction. The Working Group compared the OSHA civil and criminal penalty provisions to the same provisions under EPA and stated “OSHA’s PSM standard and EPA’s RMP regulation were created at about the same time pursuant to the Clean Air Act Amendments to address the same underlying general hazards. Yet the OSH Act’s penalty provisions are much weaker than those under the CAA’s RMP program. This imbalance in penalties should be corrected by strengthening the OSH Act’s civil monetary penalties and indexing them for inflation.”
Regardless of whether employers are or will be covered by the PSM standard, it appears that OSHA’s stated intent to increase civil and criminal enforcement penalties could impact all employers.
Stay Tuned and Stay Informed
Employers should continue to monitor the Working Group’s activities in order to stay involved and have a voice in any future rule making or policy changes.